Rethinking Nebraska’s business incentive programs

According to a new report released by the Platte Institute for Economic Research, fewer new businesses are starting up in Nebraska than in faster growing states that include Arizona, Colorado, Florida and Texas. That despite the large amount of money that Nebraska spends on economic development incentives and programs that are not helping the state catch up.

CEO Jim Vokal says they compared how much each competing state spends on incentives per capita. He says in Nebraska that is $763 compared to $759 in Texas, $193 in Colorado, $212 in Florida, $73 in Iowa and $230 in Arizona. Vokal says collectively in Nebraska that totaled $1.39-billion in 2012.

According to Vokal that is critical. He says, “What this tells us as an economic think-tank is that rather than creating a stable policy climate to create economic growth through entrepreneurship, we are not seeing the job numbers that other states are seeing. We’re actively trying to overcome this through higher incentives and it just isn’t working. We are seeing these other states have significant more job growth, creation of new businesses, higher entrepreneurship rates.”

According to the report, entrepreneurship is essential for economic growth and the U.S. Small Business Administration tracks new business growth each year. In 2014, they reported Nebraska saw new small firm growth of over 8% compared to Arizona, Colorado, Florida, Iowa and Texas that saw an average 11% growth.

Vokal says states that are seeing success have a more welcoming tax policy for everyone instead of the incentives approach. He says our entrepreneurship rate is much lower than competing states and this is an important issue as we head into the next legislative session when the discussion on taxes continue.